Global population growth presents business opportunities

A recent report from Roland Berger outlines “exciting business opportunities” resulting from population growth. The German management consultancy projects the global population will expand to 8.3 billion by 2030, with 95 percent of the growth coming from emerging and developing countries. At the same time such regions will account for 70 percent of GDP growth.

In addition to BRIC nations (Brazil, Russia, India, China), countries such as Indonesia, Mexico, Turkey, Saudi Arabia, Iraq, and Argentina are projected to have the highest population and GDP growth over the next 20 years. (A list of the top 20 can be found in the full PDF here.)

As the populations and economies of those countries rapidly expand, so too will the global middle class, creating growth opportunities in the consumer goods, construction, education, and medical sectors. Combined with a demographic shift from rural to urban areas, the population boom will also increase demand for transportation and energy products and services.

But businesses involved in providing the most basic needs may be positioned for the greatest gains. The UN estimates that global agriculture production will need to increase 70 percent by 2050 to keep up with population growth. Due to land scarcity, 90 percent of required production increases will need to come from augmenting crop yields and cropping intensity, while only 10 percent will come from expanding arable land. Those numbers aren’t lost on producers of agricultural chemicals.

The population boom also presents obvious opportunities for pharmaceutical companies, which will see demand grow for treatments of infectious diseases like malaria, as well as chronic conditions such as cancer. The World Health Organization estimates that by 2015, more than 10 million deaths could be avoided annually by increasing health interventions, the majority of which depend on essential medicines.

Such dire stakes beg the question of where we stand today. The global population recently topped 7 billion, according to the United Nations, which marked the occasion with a call to the world’s leaders to address crises facing many parts of the planet: shortages of food, potable water, and adequate medicine and health care; human rights abuses; environmental challenges; growing poverty and wealth disparity; and economic and political instability.  It’s a sobering reminder that whatever opportunities population growth brings, it presents even greater challenges.

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Photo by James Cridland, used under a Creative Commons license.

Josh Lower

Josh Lower is an industry editor for First Research/Hoover's.

Read more articles by Josh Lower.

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